The Coming Battle

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CHAPTER V.

EFFORTS TO REMONETIZE SILVER AND PRESERVE THE GREENBACK.

"According to my viewers of the subject, the conspiracy
which seems to have been formed here and in Europe, to destroy by legislation
and otherwise, from three-sevenths to one-half, of the metallic money of
the world, is the most gigantic crime of this or any other age." - John
G. Carlisle, in 1878.

"It is the monometallists who are the authors of the depreciation
which they point to as a proof of the unworthiness of the metal they cry
down. They resemble the people who, having tied the logs of a horse, call
out for him to be killed because he does not gallop." - Henri Cernushi.

In the preceding chapter, the writer faithfully endeavored
to give a true history of the legislation culmination in the act of February
12, 1873, which struck down the standard silver dollar as the unit of account.

Step by step, the money power successfully attained its
great end in the halls of Congress, and, with the downfall of silver, nothing
apparently stood in its way for the complete control of the currency of
the nation, and consequently an oppressive mastery over all other property.

The financial legislation, up to this period, was dictated
by the national banks and their firm allies, the money lenders of London.

Congress merely registered the demands of this money power
upon the statute books as the law of the land.

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Since April 1, 1873, we have ascertained that a single
standard of gold was fastened upon the nation by the combined influence
of England and her ally - the national banking system.

The passage of the so-called specie resumption act of
1875 planted this country upon a gold standard, and practically gave the
banks a monopoly of the currency.

This was the policy planned and matured by the money power
to place the vast business interests of the nation upon a bank credit basis
as the sole method of carrying on all trade and commerce.

The way was apparently clear to substitute a national
bank credit currency in lieu of legal tender silver and greenbacks, force
al1 business to bc tributary to the banks, and to perpetuate a huge national
debt.

This system of finance was the exact counterpart of that
of England - in fact, it was borrowed from that country.

That the scheme of finance embodied in the national banking
act was imported from England by John Sherman - the author of the original
bill providing for its creation - is indisputable.

In one of his reports as Secretary of the Treasury, Mr.
Sherman refers to this fact and says: "Both England and the United States
have settled upon a bank currency secured by government bonds."

This language of Mr. Sherman, in thus speaking of England
and the United States, signifies a unity of purpose to fasten on this country
the British system.

To illustrate the immense power of the Bank of England
over the people of Great Britain, we quote from a report made by the Chamber
of Commerce of the city of Manchester, England, in 1859, which says: -

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"Although it scarcely comes within the scope of their
present object, the board will add a reflection upon the subject of the
undue privileges assumed by the Bank of England. That such a power over
the property and even over the lives of the people of this country can
be allowed to exist is one of the phenomena of our civilization. That their
directors, twenty-six in number, can in secret session, without the consent
of their constituents, decide the value of all property, is to be regarded
as one of the greatest crimes against modern civilization."

In the face of this indictment against the Bank of England,
Mr. Sherman appropriated its plan as the model of his scheme - the national
banking act of February 25, 1863.

After the demonetization of silver in 1873, the most disastrous
panic ever known in history up to that time, swept over this country, tens
of thousands of failures occurred, entailing losses of hundreds of millions
of dollars of capital.

The extent of the loss wrought by that great crash cannot
be described by the language of man. Resource must be had to figures to
convey an adequate idea of the magnitude of the disaster flowing from this
wide spread ruin and wreckage of values.

In 1873, the number of failures was 5,183, with liabilities
of $228,500,000 1n 1874,the failures were 5,830, and the liabilities, $155,239,000;
in 1875 the failures were 7,740, and liabilities of $201,000,000;in 1876,
the number of failures was 9,092 with a loss of $191,000,-000; in 1877,
the failures were 8,872 and liabilities were $190,669,000; in 1878,
the failures reached 10,478 with the vast aggregate of $234,383,000 in
liabilities - a total of failures numbering 45,195, with liabilities of
$1,ll0,-

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906,000 - exceeding the enormous war indemnity paid by
France to Germany.

Exclusive of this immense loss to business, the amount
of suffering borne by the people will never be known to the historian.

Hundreds of thousands of skilled and unskilled workmen
were thrown out of employment, although the crops were abundant, and the
number of consumers was larger than ever before known.

Then, for the first time in the history of the United
States, appeared that phenomenon - the American tramp - whose appearance
and permanency, as an established institution in civil society, is a problem
that must be solved some time in the near future.

Then occurred an universal reduction of wages in all the
leading industries throughout the United States, and in many eases skilled
workmen received a wage of less than one dollar per day. Hundreds of thousands
of American citizens, the flower of the industrial class, struck against
these starvation wages, and these strikes spread all over the United States,
resulting in tumults, riots,- and bloodshed, assuming the proportions of
a civil war.

The United States troops were called out to put down the
workingmen at the point of the bayonet, and their just grievances were
quenched by the regular army.

It was during this period that a celebrated divine, in
a sermon delivered from his pulpit, said: -

"Is not a dollar a day enough to buy bread? Water costs
nothing! And a man who cannot live on bread is not fit to live. A family
may live, laugh, love, and be happy, that eats bread in the morning with
good

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water, and good water and bread at noon, and water and
bread at night."

This humane discourse was uttered by a minister of the
gospel who received the princely salary of $25,000 per annum.

Jay Gould, the great railroad wrecker, said: "We shall
shortly find ourselves living under a monarchy. I would give a million
dollars to see Grant in the white house."

The New York Times, a republican journal, said: -

"There seems to be but one remedy, and it must come -
a change of ownership of the soil and the creation of a class of land-owners
on the one hand and of tenant farmers on the other - something similar
to what long existed in the older countries of Europe."

Hon. J. C. Burrows, a republican member of Congress from
Michigan, gave utterance to the following language in a speech delivered
by him on the question of finance: -

"To-day, the best that could happen to the financial interests
and the business interests would be for Congress to pass a law, at its
very next session, to punish with death any member of Congress that would
make a speech on finance for the next twenty years. What we want is to
be let alone, and we are on the high road to prosperity."

Rev. Joseph Cook, of Boston, a divine and public lecturer,
used this remarkable language in a speech delivered by him: -

"The strongest of this generation wants a dictator. I
say come on with your schemes of confiscation and forced loans, and graded
income taxes, and irredeemable currency, under universal suffrage, and
if you are sufficiently frank in proclaiming the doctrines of your ringleaders,
then, under military necessity, and even here in the United States, we
must get rid of universal

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suffrage, and we shall. Rather than allow these things
we will have one of the fiercest of civil wars."

The Nevada Chronicle, the organ of the millionaire Senator
Sharon, editorially said: -

"We need a stronger government. The health of the country
demands it. Without capital and capitalists our government would not be
worth a fig. The capital of the country demands protection; its rights
are as sacred as the rights of the paupers who are continually prating
of the encroachments of capital and against centralization. We have tried
Grant, and we know him to be a man for the place above all others. He has
nerve. As President he would be commander-in-chief of the army and navy,
and when the communistic tramps of the country raise mobs to tear up railroad
tracks, and to sack cities on the sham cry of `bread or blood,' he would
not hesitate to turn loose upon them canister and grape. The health of
the country has to bear the burden of government and it should contro1
it. The people are becoming educated up to this theory rapidly, and the
sooner the theory is recognized in the constitution and laws, the better
it will be for the people. Without blood, and rivers of it, there will
be no political change of administration. The moneyed interests, for self-preservation,
must sustain the republican party. The railroads, the banks, and the manufacturers,
the heavy importers, and all classes of business in which millions are
invested, will sustain the supremacy of the republican party.

"To avert fearful bloodshed, a strong central government
should be established as soon as possible."

These are but a few of the many expressions of the sentiments
entertained by a corrupt and subsidized press, clerical hypocrites, and
gigantic knaves.

United States Senator Sharon was one of the most notorious
corruptionists and libertines that ever disgraced the name of man. Statesmen
and financiers of

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the stamp of Gould and Sharon are libels on the human
race, and their influence was a standing menace against the liberties of
the people.

This panic hung over the people like a pall for seven
long years. The extent of the suffering throughout the duration of this
panic is eloquently expressed by Colonel Ingersoll, who said: -

"No man can imagine, all the languages of the' world can
not express what the people of the United States suffered from 1873 to
1879. Men who considered themselves millionaires found that they were beggars;
men living in palaces, supposing they had enough to give sunshine to the
winter of their age, supposing that they had enough to have all they loved
in affluence and comfort, suddenly found that they were mendicants with
bonds, stocks, mortgages, all turned to ashes in their hands. The chimneys
grew cold, the fires in furnaces went out, the poor families were turned
adrift, and the highways of the United States mere crowded with tramps."

Of course the wise men of that day, in their conceit,
discovered a reason for the panic of

1873. In their learned dissertations on the origin of
this financial breakdown, they asserted that over production was the moving
cause that so fearfully multiplied failures, threw workmen out of employment,
and made hundreds of thousands of men, women, and children feel the pangs
of hunger and starvation.

The reasoning of these financial wiseacres took the form
of the following syllogism: Panics, want and starvation are results of
the production of large quantities of wheat, corn, and other date the American
people produced immense crops of farm products; therefore, these immense
crops were the

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cause of panics, bankruptcies, loss of employment, hunger,
and starvation. Such was the theory gravely announced by so-called learned
professors of political economy.

This doctrine was taken up and echoed in the halls of
Congress by alleged statesmen, reiterated in the press, and formed the
burden of the stump speeches of designing politicians who sought political
preferment. This absurd, sophistical argument had some weight-with the
unthinking. Ordinarily, instances of such suffering that were prevalent
during the panic of 1873, usually proceeded from failures of crops.

It is a historical fact that a1l great panics that had
occurred in the United States up to this time, were during periods when
nature exerted herself to the utmost to make bounteous provision for the
wants of man.

The scarcity of money, the want and suffering became so
great that, in 1876, the Chamber of Commerce of New York City adopted a
resolution urging the immediate repeal of the specie Resumption Act of
January 24, 1875.

It was on this occasion that John Sherman met with this
body, and gave utterance to the statement quoted in the preceding chapter
that, "The United States as usual was influenced by Great Britain in making
gold coin the standard. This suits England but it does not suit us."

One great cause of the panic originating in 1873, was
the natural result of that financial policy, which had persisted in a long
continued contraction of the currency, a policy initiated by Hon. Hugh
McCulloch, who had been appointed Secretary of the Treasury in 1865.

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Upon his appointment as the head of the Treasury Department,
he at once took measures, in pursuance of the various acts of Congress,
to fund the currency of the nation into interest-bearing bonds, and to
create a permanent public debt.

Under the act of April 12, 1866, the Secretary of the
Treasury was authorized to exchange interest-bearing bonds for the notes
circulating as money, whether said notes were interest-bearing or otherwise.

Secretary McCulloch, a national banker by profession,
proceeded to carry out this policy of a merciless contraction of the currency
to the full extent of his power.

At the time he began this policy of funding the currency
into long time interest-bearing bonds, the entire volume of the various
notes performing the functions of money amounted to the sum of $1,983,000,000,
exclusive of gold and silver coin. This volume of currency consisted of
greenbacks, temporary loan certificates, one and two-year treasury notes,
certificates of indebtedness, postal currency, compound interest treasury
notes, fractional currency, 7-30 notes of August and September, 1864, 7-30
notes of 1864-65, state bank circulation, and national bank notes.

The two classes of 7-30 treasury notes alone amounted
to $845,553,000

It has been denied that these treasury notes circulated
as money, but General Logan and numerous other public men of that day,
declared that these notes formed a very material part of the volume of
currency.

With this large volume of circulation the national banking
money power saw that it was impossible to obtain control of the currency
of the nation.

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Money being plentiful, business was transacted on a cash
basis, and, therefore, the people were not compelled to borrow the circulating
notes of the national banks at a high rate of interest, and thus be placed
in the power of these banks.

These conditions were so apparent, that, in his rcport
as Secretary of the Treasury for the year 1865, Mr. McCulloch said:

"The country as a wholc, notwithstanding the ravages of
war and the draught upon labor, is by its greatly developed resources,
far in advance of what it was in 1857. The people are now comparatively
free from debt."

Hence it was the policy of the national banking money
power, by this funding of the ready cash of the country into bonds, and
substituting the national bank circulation for the currency issued by the
government, to control the business of the nation, and ultimately the votes
of the people who were obligated to the banks as borrowers.

The national banks desired that all business should be
done upon credit; that this credit should be given to them by the government
in the form of national bank notes, the latter form of currency to be loaned
by the banks to the business interest of the country.

Secretary McCulloch carried out this policy so energetically,
and contracted the volume of legal tender currency so rapidly, that strong
protests went up from the people, and, on the 3d of February, 1868, Congress
forbade the further destruction of the legal tenders, which had been reduced
to $346,000,000. The total contraction of all forms of notes circulating
as money, reached the enormous sum of $1,ooo,ooo,ooo, during the administration
of Mr. McCulloch. We include in

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these last figures, all government obligations utilized
as money by the people, whether legal tender or othcrwise.

In a speech delivered in the Senate in 1874, General Logan
stated that the contraction of the volume of money up to that time was
more than one billion dollars

It was this murderous policy of contraction, initiated
by Secretary McCulloch and followed by his successors, that eventually
led to the panic of 1873, from which dates a universal stagnation of business
lasting seven long years.

During this panic, the democracy was successful in the
elections of 1874 and for the first time since 1860, the Lower House was
controlled by the party of Jefferson and Jackson.

It was then ascertained that silver had been demonetized
by the act of February 12, 1873, and the House at once endeavored to enact
measures to undo the wrong.

During the Forty-fourth Congress, which came into existence
March 4,1875, and continued in power unti1 the 4th of March, 1877,the President
was republican. In the Senate there were 46 republicans, 29 democrats,
and one vacancy. The House of Representatives was composed of 186 democrats
and 107 republicans.

This Congress convened on the 6th of December, 1875.

On March 27, 1876, the Committee on Appropriations brought
forward House bill 2,450, which appropriated money for a deficiency for
the Bureau of engraving and printing, and section a provided for the issue
of subsidiary silver.

The bill was transmitted to the Senate, and it was referred
to the Finance Committee, of which Mr. Sherman was chairman.

On April 10, 1876, Mr. Sherman, from the Finance Committee,
reported the bill with amendments; one amending section 3 so as to authorize
the coinage of a silver dollar of 412.8 grains - a legal tender not exceeding
twenty dollars in any one payment except for customs, dues, and interests
on public debt, and stopped the coinage of trade dollars, Another - a new
section 4 - authorized the exchange of silver dollars for an equal amount
of United States notes to be retired, canceled, and not reissued; and also
for coining silver bullion at its market value. The amended bill thus reported
by Senator Sherman, authorized the coinage of a silver dollar of 412.8
grains, which, whilc it would increase its legal tender debt-paying power
from five dollars to treaty dollars, could not be received for custom dues,
and could not be utilized for the payment of interest on the public debt.

These silver dollars werc to be exchanged for an equal
amount of United States notes, which were thus to be permanently retired
from circulation.

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The propositions of the amended bill, as reported by Senator
Sherman, should it become a law, would not increase the volume of money
a single dollar, for the reason that the silver dollar would be solely
used to retire an equal amount of legal tender currency.

The most vicious part of the amended bill was that which
limited the legal tender debt-paying power of the silver dollar to twenty
dollars; the legal tender currency, for which the silver dollars were to
be substituted, was an unlimited legal tender, except for duties on imports
and interest on the public debt.

Therefore, the adoption of this measure would be the substitution
of a limited legal tender silver dollar for a full legal tender currency,
leaving gold the sole unlimited legal tender for the payment of all debts,
public and private, including duties on imports and interest on the public
debt.

The amended bill was discussed in the Senate, and, on
motion of Mr. Sherman, sections 3 and 4 of the amended bill were stricken
out, and that motion carried out of the bill the House amendment offered
by Mr. Reagan which proposed to make trade dollars legal tender to the
amount of fifty dollars, which, by the act of February 12, 1873, were limited
to five dollars for any one payment.

By this parliamentary device with the House bill, Mr.
Sherman succeeded in killing that measure, the passage of which would have
conferred an enlarged debt-paying power on the trade dollar.

On June 10, 1876, Mr. S. S. Cox, from the Committee on
Banking and Currency, reported a joint resolution to issue the silver coins
in the Treasury to an amount not exceeding $10,000,000 in exchange for
an equal

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amount of legal tender notes, to be kept as a special
fund, to be reissued only upon the retirement of fractional currency; which
was passed without a division.

June 21, 1876, in the Senate, the House joint resolution
was amended by adding a section prohibiting the coinage of the trade dollar
except for export trade; thus striking down the trade dollar, the only
dollar authorized by the coinage law of 1873.

Again, the fine Italian hand of the money power was visible
in the Senate amendment to this joint resolution.

On June 10, 1876, Mr. Cox, from the Committee on Banking
and Currency, reported a resolution in three sections, providing for an
increased coinage of silver. It was passed without division, and was transmitted
to the Senate.

In the Senate June 27, 1876, the bill was considered on
the report of the Finance Committee to strike out all after the enacting
clause and insert four new sections. This was a substitute proposed by
the Senate Committee on Finance, headed by the distinguished senior Senator
from Ohio.

Section 1 provided for the coinage of silver dollars of
412.8 grains, to be legal tender for sums not exceeding twenty dollars.

Section 2 provided for exchanging such dollars and minor
coins for legal tenders to be canceled and not reissued or replaced.

Section 3 provided for purchasing silver bullion at market
rates for such coinage, to be made without loss in coinage and issue.

Section 4, prohibiting legal tender of the trade dollar
and limiting its coinage to export demand. This was before the law of July
22, 1876, had been enacted.

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Again the scheme to substitute a limited legal tender
silver dollar for United States notes and treasury notes was brought forward
in these amendments.

The continued efforts of the Senate to retire permanently
the government legal tender notes were a part of the plan of the national
banking money power to force the business of the country to be transacted
by a credit money.

This bill also aimed at the coinage of silver on government
account alone, hence, should the silver so coined out of the bullion purchased
by the government decline in bullion value as compared with gold, the national
banking money power would demand that the silver dollar be redeemed in
gold. It furthermore took away all legal tender debt-paying power of the
trade dollar, and limited its coinage to export demand.

On June 28, 1876, Senator Bogy moved to amend section
x of the Senate bill by striking out the words "Hot exceeding twenty dollars,"
the effect of which would be to make the silver dollar a full legal tender
for the payment of all debts. The amendment was agreed to by a vote of
18 to 14.

On June 29, 1876, the bill as amended was recommitted
to the Finance Committee, where it slept the sleep that knows no waking.

On July 19, 1876, in the House of Representatives, Mr.
Bland, from the Committee on Mines and Mining, reported resolution 3,635,
authorizing the free coinage of gold and silver. This resolution was carried
over to the next session of Congress, and, on December 13, 1876, Mr. Bland
offered a substitute for the resolution of July 19, 1876, which provided
for the free and unlimited coinage of the silver dollar of 412 1/2 grains,
with full legal tender power.

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This substitute, which restored silver to the position
it occupied prior to 1873, was passed by a vote of 168 yeas to 53 nays.
It was sent to the republican Senate, referred to the Finance Committee
where it was smothered by John Sherman.

On August 15, 1876, a joint resolution was adopted by
Congress which provided for the creation of s Monetary Commission, "To
consist of three Senators, to be appointed by the Senate, three members
of the House of Representatives, to be appointed by the Speaker, and experts
not exceeding three in number, to be selected by and associated with them."
Congress instructed the commission to make an examination into the money
question, and to give its opinion as to "The best means for providing for
facilitating the resumption of specie payments."

On March 2, 1877, the commission made its report,
or more strictly speaking, several reports. The majority report signed
by five of its members, gave a history of the bi-metallic laws in force
previous to 1873, together with their effects on the value of commodities,
trade, and commerce, and, as its conclusion, advocated an immediate return
to the bi-metallic standard of sixteen to one.

In speaking of the effect of the volume of money on values,
and the baleful influences of falling prices on society, the majority report
says: -

"At the Christian era the metallic money of the Roman
empire amounted to $1,800,000,000. By the end of the fifteenth century
it had shrunk to less than $200,000,000. During this period a most extraordinary
and baleful change toot place in the condition of the world. Population
dwindled, and commerce, arts, wealth, and freedom all disappeared. The
people were

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reduced by poverty and misery to the most degraded conditions
of serfdom and slavery. The disintegration of society was almost complete.
The conditions of life were so hard that individual selfishness was the
only thing consistent with the instinct of self-preservation. All public
spirit, all generous emotions, all the noble aspirations of man shriveled
and disappeared as the volume of money shrunk and as prices fell.

"History records no such disastrous transition as that
from the Roman empire to the dark ages. Various explanations have been
given of this entire breaking down of the framework of society, but it
was certainly coincident with the shrinkage in the volume of money, which
was also without historical parallel The crumbling of institutions kept
even step and pace with the shrinkage in the stock of money and the falling
of prices. All other attendant circumstances than these last have occurred
in other historical periods unaccompanied and unfollowed by any such mighty
disasters. It is a suggestive coincidence that the first glimmer of light
only came with the invention of bills of exchange and paper substitutes,
through which the scanty stock of the precious metals was increased in
efficiency. But not less than the energizing influence of Potosi and Fll
the argosies of treasure from the net world were needed to arouse the old
world from its comatose sleep, to quicken the torpid limbs of industry,
and to plume the leaden wings of commerce.

"It needed the heroic treatment of rising prices to enable
society to reunite its shattered links, to shake off the shackels of feudalism,
to relight and uplift the almost extinguished torch of civilization. That
the disasters of the dark ages were caused by decreasing money and falling
prices, and that the recovery therefrom and the comparative prosperity
which followed the discovery of America were due to an increasing supply
of the precious metals and rising prices, will not seem surprising or unreasonable
when the noble functions of money are considered. Money is the

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great instrument of association, the very fiber of social
organism, the vitalizing force of industry, the protoplasm of civilization,
and as essential to its existence as oxygen is to animal life. Without
money civilization could not have had a beginning; with a diminishing supply
it must ]anguish, and, unless relieved, finally perish."

The report sets out the reason why silver was demonetized
in 1873. It says: -

"Manifestly the real reason for the demonetization of
silver was the apprehension of the creditor classes (money lending classes)
that the combined production of the two metals would raise prices and cheapen
money unless one of them was shorn of the money function. In Europe this
reason was distinctly

avowed."

This conclusion has been abundantly verified, inasmuch
as every attempt made by Congress for the restoration of silver as legal
tender money has been denounced as a scheme to rob the public creditors
- a charge which has been reiterated thousands of times in the press, in
the halls of Congress and elsewhere.

Professor Bowen, of Massachusetts, and Representative
Gibson handed in a minority report, in which it was stated that every attempt
made previous to 1873 to establish a double standard "has been a total
failure."

Senator Boutwell, in his minority report as a member of
the commission, stated his conclusions in effect as follows; he said: -

"A successful use of gold and silver simultaneously in
any country can be effected only by their consolidation upon an agreed
ratio of value, or by the concurrence of the commercial nations of the
world."

He, therefore, advocated a postponement of the free coinage
of silver by the United States, "Until the

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effort to secure the cooperation of other nations has
been faithfully tried."

On the 4th of March, 1877,Rutherford B. Hayes was inaugurated
President of the United States. He was the beneficiary of that fraud -
the Returning Board of Louisiana. In the formation of his cabinet he selected
John Sherman for the responsible post of Secretary Of the Treasury.

During the time he was at the head of that greet department,
the national banking money power became more imperious in its demands upon
the government. The United States Treasury was made wholly subservient
to the clearing house of New York City.

The immense resources of the Treasury were practically
placed at the disposal of the banks, which fact became so notorious, that
United States Senator James B. Beck and other members of Congress denounced
Secretary Sherman for bestowing such munificent favors upon a fear great
banks.

During the session of the Forty-fifth Congress, which
came into power March 4, 1877, and which was in control until March 4,
1879 the President was republican; the House was democratic by a vote of
156 to 136; the Senate consisted of 39republicans, 36 democrats
and 1 independent.

In the first or called session of the Forty-fifth Congress,
November 5, 1877, Mr. Bland, of Missouri, introduced a bill in the House
of Representatives entitled, "An act to authorize the free coinage of the
standard silver dollar and to restore its legal tender character."

The text of the bill was as follows: -

"Be it enacted by the Senate and House of Representatives
of the United States of America in Congress

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assembled, That there shall be coined at the several mints
of the United States, silver dollars of the weight of 412 1/2grains troy
of standard silver, as provided in the act of January 18, 1837, on which
shall be the devices and superscriptions provided by said act; which coins,
together with all silver dollars heretofore coined by the United States
of like weight and fineness, and shall be a legal tender, at their nominal
value, for all debts and dues, public and private, except where otherwise
provided by contract; and any owner of silver bullion may deposit the same
at any United States coinage mint or assay office, to be coined into such
dollars, for his benefit, upon the same teens and conditions as gold bullion
is deposited for coinage under existing laws.

"Section 2. All acts and parts of acts inconsistent with
the provisions of this act are hereby repealed."

The rules were suspended by a vote of 164 yeas to 34 nays,
and the bill was passed and transmitted to the Senate.

On November 21, 1877, Mr. Allison, from the Finance Committee,
reported the bill to the Senate with amendments to strike out the clause
beginning "And any owner of silver bullion," and to insert in lieu thereof
a purchasing clause, and to add section a for an international monetary
conference.

From 1862 up to 1875, the legislation of Congress tended
wholly for the benefit of the East. Almost every lair was enacted with
the view of giving the New England states, New York, and Pennsylvania a
great preponderance over the rest of the nation; exorbitant tariffs were
levied on imported goods for the benefit of Eastern manufacturers, the
burdens of which fell upon the consumer; foreign contract labor laws were
adopted to afford these highly-protected manufacturers an abundant supply
of cheap labor as a means for

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crushing the various labor organizations; out of the billions
of money appropriated by Congress during that period, by far the greater
portion was expended in those few states lying along the Atlantic; Eastern
corporations received subsidies of public money to the amount of millions;
the great railway corporations, burdened with liabilities far exceeding
their assets, robbed the west and south of hundreds of millions of dollars
by the imposition of heavy transportation charges, and these railways were
owned by Eastern capitalist; while the rich silver mines of the West mere
practically rendered valueless by the demonetization of silver.

During the debate in the Senate on this silver bill, Hon.
John J. Ingalls, a republican Senator from Kansas, in a speech delivered
on the 14th of February, 1877,used the following strong language:
-

"If by any process all business were compelled to be transacted
on a coin basis, and actual specie payments should be enforced, the whole
civilized world would be bankrupt before sunset. There is not coin enough
in existence to meet in specie the one-thousandth part of the commercial
obligations of mankind. Specie payments, as an actual fact, will never
be resumed, neither in gold nor silver in January, 1879, nor at any other
date, here nor elsewhere. The pretense that they will be is either dishonest
or delusive."

The Senator in the same speech points to the fact that
the Eastern section of the country had subordinated all Federal legislation
to their demands, he thus arraigns the greed of the East: -

"The Senator from Wisconsin was right. It is not the east
against the west.

"It is the east against the west and south combined. It
is the corn and wheat and beef and cotton of the country against its bonds
and its gold; its productive

179

industry against its accumulations. It is the men who
own the public debt against those who are to pay it, if it is to be paid
at all. If the bonds of this government are ever paid, they will be paid
by the labor of the country, and not by its capital. They ate exempt from
taxation and bear none of the burdens of society.

"The alliance between the west and the south upon all
matters affecting their material welfare hereafter is inevitable. Their
interests are mutual and identical. With the removal of the causes of political
dissension that have so long separated them, they must coalesce, and united
they will be invincible. The valleys of the Mississippi and Missouri, with
their tributaries, form an empire that most have a homogeneous population
and a common destiny from the Yellowstone to the Gulf.

"These great communities have been alienated by factions
that have estranged them only to prey upon them and to maintain political
supremacy by their separation. Unfriendly legislation has imposed intolerable
burdens upon their energies; invidious discriminations have been made against
their products; unjust tariffs have repressed their industries. While vast
appropriations have been made to protect the harbors of the Atlantic, and
to erect beacons upon every headland to warn the mariner with silent admonition
from the "merchant-marring rocks," the Mississippi was left choked with
its drifting sands till the daring genius of Eads undertook the gigantic
labor of compelling the great stream to dredge its own channel to the sea.
The opening of this avenue of commerce marks the epoch of the emancipation
of the west and south from their bondage to the capital of the east. In
asking the passage of this bill they are asking less than they will ever
ask again. When I reflect upon the burdens they have borne, the wrongs
they have suffered, I am astonished at their' moderation."

The charges made by Mr. Ingalls against the cupidity of
the East were true, and at the same time it was

180

a bitter condemnation of the record of the republican
party.

During the same speech on this bill, the brilliant Kansan
had recourse to metaphor to upbraid those who advocated a single standard
of gold, and at the same time he paid a glowing tribute to the monetary
properties of the silver dollar as the money of the people

He said: -

"No enduring fabric of national prosperity can be builded
on gold. Go1d is the money of monarchs; kings covet it, the exchanges of
nations are effected by it. Its tendency is to accumulate in vast masses
in the commercial centers, and to move from kingdom to kingdom in such
volumes as to unsettle values and disturb the finances of the world. It
is the instrument of gamblers and speculators, and the idol of the miser
and the thief. Being the object of so much adoration, it becomes haughty
and sensitive and shrinks at the approach of danger, and whenever it is
mast needed it always disappears. At the slightest alarm it begins to loot
for a refuge. It flies from the nation at war to the nation at peace. War
makes it a fugitive.

"No people in a great emergency ever found a faithful
ally in gold. It is the most cowardly and treacherous of all metals. It
makes no treaty that it docs not break. It has no friend whom it does not
sooner or later betray. Armies and navies are not maintained by gold. In
times of panic and calamity, ship t and disaster, it becomes the
chief agent and minister of ruin. No nation every fought a great war by
the aid of gold. On the contrary, in the crisis of greater peril it becomes
an enemy more potent than the foe in the field; but when the battle is
won and peace has been secured, gold reap and claims the fruits of victory.
In our own civil war it is doubtful if the gold of

181

New York and London did not work us greater injury than
the powder and lead and iron of the rebels. It was the most invincible
enemy of the public credit. Gold paid no soldier nor sailor. It refused
the national obligation. It was worth most when our fortunes were lowest.
Every defeat gave it increased value. It was in open alliance with our
enemies the world over, and all its energies were evoked for our destruction.
But as usual when danger has been averted and the victory secured, gold
swaggers to the front and asserts the supremacy. But silver is the money
of the people. It is the money of cages and retail. Its tendency is toward
diffusion and dissemination. It enters into the minute concerns of traffic,
and is exchanged day by day for daily bread. It penetrates the remotest
channels of commerce, and its abundance, balk, and small subdivisions prevents
its deportation in sufficient amount to disturb or unsettle values. If
it retires at the approach of danger, or from the presence of an inferior
currency, it still remains at home ready to respond to the first summons
for its return."

The characteristics which he attributes to gold in this
beautiful figure of speech, were those which belonged to its owners, and
thus he scathingly denounced the greed of the gold gamblers and bullion
brokers of the East, who, during the war, rejoiced at every reverse of
the northern armies, for, with the sinking of the fortunes of the Union
cause, the more valuable became gold proportionately.

The silver bill as amended by the Senate was returned
to the House for concurrence and passage. The manner in which the House
bill was mutilated by the Senate aroused the anger of the House, and a
fierce debate arose between the friends of silver and its opponents. Some
of those who most strongly opposed the bill as a concession to the West
and South

182

were men who men notorious for the scandals that blackened
their reputations as public men. Those members of Congress, who opposed
the remonetization of silver in any form whatever, had, in their past careers,
shown a remarkable inclination for Credit Mobilier stock, and other corrupt
deals which had so deeply disgraced preceding Congresses.

Yet these Credit Mobilicr statesmen were the ones who
prated the loudest for the "public credit," "the public faith," and "honest
money." It was Satan preaching against sin.

Among other powerful advocates of the coinage of silver
me John G. Carlisle, who was recognized on the floor of the House as its
ablest logician. Mr. Carlisle charged that the demonetization of silver
was brought about by a conspiracy of the money power.

He said: -

"I know that the world's stock of precious metals is none
too large, and I see no reason to apprehend that it wil1 ever be so. Mankind
will be fortunate indeed if the annual production of gold and silver coin
shall keep pace with the annual increase of population, commerce, and industry.
According to my views of the subject, the conspiracy which seems to have
been formed here and in Europe to destroy by legislation and otherwise
from three-sevenths to one-half of the metallic money of the world is the
most gigantic crime of this or any other age. Thc consummation of such
a scheme would ultimately entail more misery upon the human race than all
the wars, pestilences, and famines that ever occurred in the history of
the world.

"The absolute and instantaneous destruction of half the
entire movable property of the world, including houses, ships, railroads
and other appliances for carrying on commerce, while it would be felt more
sensibly at the moment, would not produce anything like a pro-

183

longed distress and disorganization of society that must
inevitably result from the permanent annihilation of one-half the metallic
money of the world."

This terrific arraignmcnt of the money power was followed
by an appeal to the House, in which he advised the blocking of the wheels
of government by a refusal to appropriate money for its support should
the President veto the bill. He said: -

" The struggle now going on cannot cease, and ought not
to cease, until all the industrial interests of the country are fully

and finally emancipated from the heartless domination
of syndicates, stock exchanges, and other great combinations of money grabbers
in this country and in Europe. Let us, if we can do no better, pass bill
after bill, embodying in each some subtantia1 provision for relief, and
send them to the executive for his approval. If he witholds his signature,
and we are unable to secure the necessary vote, here or elsewhere, to enact
them into laws notwithstanding his veto, let us, as a last resort, suspend
the rules and put them into the general appropriation bills, with the distinct
understanding that if the people can get no relief the government can get
no money."

After a long debate the House anally acquiesced in the
senate amendments. It was the bill as amended by the Senate or nothing,
for at that tinge the upper house was the stronghold of the money grabbers,
syndicates, and combinations of capital, chose greed was so severely denounced
in the powerful speech of Mr. Carlisle.

The bill as amended by the Senate finally passed both
houses, and was presented to President Hayes, who returned it to the House
with his veto and a message stating his reasons for refusing to sign the
measure.

184

In his veto message, the President states that one of
the reasons why the bill does not meet hie approval arose from the fact
that the proposed dollar would be worth but ninety or ninety-two cents,
as compared with the standard gold dollar.

It will be remembered that the sole reason advanced by
John Sherman, at this time Secretary of the Treasury, for the demonetization
of the silver dollar in 1868 and subsequent years, was, that the silver
dollar was more valuable than the gold dollar.

President Hayes, and presumably his Secretary of the Treasury,
urged as a reason for the veto of this bill providing for the coinage of
silver, that it was worth less than the gold dollar.

The President says: -

"The right to pay duties in certificates for silver deposits
will, when they are issued is sufficient amount to circulate, put an end
to the receipt of revenues in gold, and thus compel the payment of silver
for both the principal and interest on the public debt."

The future receipts of revenues have shown that this prophecy
of President Hayes fell to the ground. After the passage of this bill over
his veto, the volume of gold in circulation and in the banks increased
in the course of a few years to many millions of dollars.

The President further says: -

"The standard of value should not be changed without the
consent of both parties to the contract. National promises should be kept
with unflinching fidelity. There is no power to compel a nation to pay
its just debts. Its credit depends on its honor. The nation owes what it
has led or allowed its creditors to expect. I cannot approve a bill which,
in my judgment, authorizes the violation of sacred obligations The obligation
of public faith transcends all questions

185

of profit or public advantage. Its unquestionable maintenance
is the dictate as well of the highest expediency as of the most necessary
duty, and should ever be carefully guarded by the executive, by congress,
and by the people."

This plea for the poor bond holder, that noble patriot
who originally bought bonds as low as thirty-five cents on the dollar,
bearing gold interest the equivalent in currency to eighteen per cent.,
payable a year in advance, and used by him as loaded dice to gamble on
the public credit, was the dear object of the President's solicitude.

The bond holders who secured the passage of the Credit
Strengthening Act of March 18, 1869 an act which enhanced the value of
his bonds enormously, had become sacred in the eyes of the weak Hayes.

The veto message of the President angered Congress, and,
on the same day, it rode rough shod over his veto by more than the necessary
two-thirds vote, and the bill became a lair on the 28th day of February,
1878.

To enable the reader to fully understand the coinage law
of 1878, we incorporate the text of the act in full.

It is as follows; viz.: -

"An act to authorize the coinage of the standard silver
dollar, and to restore its legal tender character.

"Be it enacted, etc, That there shall be coined, at the
several mints of the United States, silver dollars of the weight of 412
1/2 grains troy of standard silver, as provided in the act of January 18,
1837, on which shall be the devices and superscriptions provided by said
act; which coins, together with all silver dollars heretofore coined by
the United States, of like weight and fineness, shall be a legal tender,
at their nominal value, for all debts and dues, public and private, except
where otherwise expressly stipulated in the con-

186

tract. And the secretary of the treasury is authorized
and directed to purchase, from time to time, silver bullion at the market
price thereof, not less than $2,000,000 worth per month nor more than $4,000,000
worth per month, and cause the same to be coined monthly, as fast as so
purchased, into such dollars; and a sum sufficient to carry out the foregoing
provision of this act is hereby appropriated out of any money in the treasury
not otherwise appropriated. And any gain or seigniorage arising from this
coinage shall bc accounted for and paint into the treasury, as provided
under existing laws relative to the subsidiary coinage: Provided, That
the amount of money at any one time invested in such silver billion, exclusive
of such resulting coin, shall not exceed $5,000,000; And provided further,
That nothing in this act shall be construed to authorize the payment in
silver of certificates of deposit issued under the provisions of section
254 of the Revised Statutes.

"Section 2. That immediately after the passage of this
act the President shall invite the governments of the countries comprising
the Latin union, so called, and of such other European nations as he may
deem advisable, to join the United States in a conference to adopt a common
ratio between gold and silver, for the purpose of establishing, internationally,
the use of bi-metallic money and securing fixity of relative value between
those metals, such conference to be held at such place, in Europe or the
United States, at such time within six months, as may be mutually agreed
upon by the executives of the governments joining in the same, whenever
the governments so invited, or any three of them, shall have signified
their willingness to unite in the same.

"The President shall, by and with the advice and consent
of the senate, appoint three commissioners, who shall attend such conference
on behalf of the United States, and shall report the doings thereof to
the President, who shall transmit the same to congress

187

"Said commissioners shall each receive the sum of $2,5000
and their reasonable expenses, to bc approved by the secretary of state,
and the amount necessary to pay such compensation and expenses is hereby
appropriated out of any money in the treasury not otherwise appropriated.

"Section 3. That any holder of the coin authorized by
this act may deposit the same with the treasurer or any assistant treasurer
of the United States, in sums not less than ten dollars, and receive therefor
certificates Of not less than ten dollars each, corresponding with the
denominations of the United States notes. The coin deposited for or representing
the certificates shall be retained in the treasury for the payment of the
same on demand. Said certificate shall be receivable for customs, taxes,
and all public dues, and, when en received, may be reissued.

"Section 4. All acts and parts of acts inconsistent with
the provisions of this act are hereby repealed."

A comparison drawn between the provisions of the original
bill introduced by Mr. Bland and passed by the House, and those of the
act of February 28th, will be instructive.

The House bill was a free coinage measure, and it placed
silver as a money metal on the same footing as gold. It proposed to restore
silver to the same position which it held, in law, prior to its demonetization
in 1873.

Free coinage of gold created an unlimited demand for it
as money. Under free coinage, the owner of gold bullion had the right of
entry to any mint of the United States, he could have his bullion transformed
into gold coin without charge, and returned to him as full legal tender
money. Therefore, the law which conferred the right of free coinage upon
the owner of gold bullion created an unlimited demand

188

of the use of that precious metal as money; the Government
had never restricted the amount of gold coinage.

Free and unlimited coinage of silver likewise would have
created a demand for it as money as extensive as its production.

In all ages, the chief use of the precious metals arose
from their utility as a medium of exchange - money.

The demand for the use of those metals has always exceeded
their supply.

By the Bland-Allison lair, the coinage of silver dollars
was limited, and that coinage was on Government account alone.

At the time of the passage of the Bland-Allison law, the
production of silver from the mines of the United States amounted to more
than $45,000,000for that year.

Since the demonetization of silver in 1873, its total
production in the United States amounted to $210,000,000.

This law provided for the purchase of not less than $2,000,000
of silver nor more than $4,000,000 per month.

The hellion so bought by the Government was to bc coined
into dollars as fast as purchased, and the gain or seigniorage arising
from this coinage was to be paid into the Treasury.

It will be seen that the Secretary of the Treasury was
not legally compelled to purchase more silver per month than the minimum
amount ($2,000,000).

A purchase of the minimum amount of silver wou1d afford
a market for only one-half of the yearly production, and this mould result
in an accumulation of a

189

large surplus for which there would be no demand. This
surplus would fix the price of every ounce of silver mined in the United
States, causing a fall in its bullion value.

This result would afford an opportunity for the national
banking money power to point to the silver dollar as a "dishonest dollar,"
a "90-cent dollar."

Mr. Sherman held the Treasury portfolio, and it was averred
that he would use all the influence of his once to discredit the new coinage.
He was known to be an unrelenting enemy of the free coinage of silver,
and his subsequent speeches and writings gave abundant proofs of that fact.

It was further provided in that act, that the amount of
money at any one time invested in such silver bullion, exclusive of such
resulting coin, should not exceed $5,000,000.

By this restriction the Secretary of the Treasury could
limit the annual purchase of silver to $29,000,000. He was not compelled
to purchase silver exceeding $2,000,000 per month, or $24,000,000 per annum,
and this policy which was carried out by the Secretary, made the Government
a "bear" in the silver market.

This law gave rise to a net form of contracts based upon
the legal tender clause which contained the following language, "Except
where otherwise expressly stipulated in the contract."

This exception was the most absurd provision ever embodied
in a monetary law. It declared the silver dollar to be legal tender, yet
it conferred upon money lenders the power to demonetize it by private contract.
It made the merc will of an individual superior to the collective will
of the nation. It placed the greed of

190

the shylock above the power of the constitution. Every
usurer was permitted to constitute himself a Congress and a President to
demonetize silver at will. While the powerful Government of the United
States was compelled to receive these silver dollars far debts and demands
due it, the holders of mortgages could exact gold obligations. It transferred
to the hands of the national banking money poorer the right to loan Government
credit in the form of bank notes, costing it one cent on the dollar, at
a high rate of interest, exact a note payable in gold, with the "vested
privilege" of making war against the currency of the United States.

It built up a powerful privileged class, whose interests
would be antagonistic to any future legislation of Congress, having for
its object an enlarged use of silver as money,

In his uncontradicted evidence before the British gold
and silver commission, on June 24, 1887, J. Barr Robertson stated that
"The French law makes it criminal to act on the basis of premium on money
or discount on moncy. It always did so."

The policy of France, which has the most scientific system
of money in the world, makes it a crime for any one of its citizens to
attempt to demonetize its money by private contract.

In that nation, the sovereign power of the State over
the legal value of money cannot be impaired by the greed of money changers,
bullion dealers, and bankers. After the enactment of this law a net system
of written contracts providing for the payment of money came into vogue,
denominated "gold contracts," all of which contained a stipulation that
the obligation

191

should be payable in "Gold coin of the present weight
and fineness or its equivalent."

Railroad bonds and mortgages containing gold clauses,
aggregating many hundreds of millions of dollars, were fastened upon this
species of property, and real estate mortgages and promissory notes amounting
to immense sums mere made payable in gold coin.

This plan of the money-lending class actually made an
enormous indebtedness payable in gold, a coin constantly appreciating in
value, and it practically made the single standard of gold the financial
policy of the country.

Not a single United States bond expressed an agree-meat
to pay in gold, and yet the Government turned the great majority of its
citizens over to the tender mercies of the money-lenders of the East and
Great Britain, by authorizing them to exact gold payments.

The legality of contracting against any part of the legal
tender money of the nation is extremely doubtful; and it scorns that, on
the plainest principles of justice, and on the highest grounds of public
policy, a contract in which it is sought to demonetize legal tcndcr money
is utterly void, and is therefore unconstitutional.

Section a of the Bland-Allison Act authorized the President
to invite the countries of Europe to join the United States in a conference
to secure the adoption of a common ratio between gold and silver, and for
the purpose of establishing an international bi-metallic money, and securing
fixity of relative value between these metals.

The President was authorized to appoint three Commissioners
to represent the United States at such

192

conference, if any should bc held. The Commissioners mere
to report the doings of the conference and he was to transmit the same
to Congress.

This section marked the beginning of those successive
pilgrimages of so-called international monetary commissions, who, as the
representatives of the United States, humiliated the American people by
begging the aid of European monarchies to assist in the establishment of
a financia1 system for this republic.

Section 3 provided for the issue of silver certificates
to any person who deposited with the Treasurer or any Assistant Treasurer
of the United States silver dollars in sums of not less than ten dollars.

The coin deposited for these certificates was to be retained
in the treasury for the payment of the said certificates on demand. These
certificates were receivable for customs, taxes and all public dues, and
when so received could be reissued.

The object of this section in providing for the issuance
of silver certificates was to obviate objections against the use of silver
because of its weight. The certificate was a credit money based on the
silver dollars so deposited, which latter constituted a trust fund as a
means for redeeming the certificates.

To Senator Booth, of California, belongs the honor of
suggesting the provisions of section 3 of this law.

Section 4 repealed all former laws inconsistent with the
act.

When this bill was up for consideration before Congress,
the national banking money power and its subsidized press continually prophesied
that if the silver bill should become a law, the gold of the nation would
take flight to Europe, leaving this country upon a

193

silver basic. The leading national bank presidents of
New York City were especially active in denouncing the bill, and numerous
predictions were made by them that it would be impossible to resume specie
payment if it became a law.

George S. Coe, President of the American Exchange National
Bank of New York City, publicly stated that he would give $50,000 to be
at the head of the line of those who would present themselves at the sub-treasury
on the 1st day of January, 1879, to offer greenbacks for gold, should President
Hayes not veto the bill.

So far as is known, Mr. Coe still retains his $50,000,
which he publicly stated that he would offer for the privilege of having
the first opportunity to present greenbacks for redemption in gold, and
for the plain reason that greenbacks were at par with gold - that yellow
divinity of the money changers - before the 1st day of January, 1879, approached.

One of the reasons urged against the passage of the Bland-Allison
law, as stated heretofore, was that it would endanger the resumption of
specie payments, and that it would result in placing the country on a silver
basis.

On the 19th of March, 1878, three weeks after the law
was in force, Senators Morill, Dares, Ferry, Jones, Allison, Kernan, Wallace,
Bayard, and Voorhees, composing the Finance Committee of the Senate, had
a conference with Secretary Sherman to obtain his views upon the effect
of the new silver coinage law upon resumption.

Daring this conference the following statements were made
by the Secretary to the committee in answer to the inquiries of its members:
-

194

Chairman: What effect has the silver bill had, or is likely
to have upon resumption?

"Secretary Sherman: I do not want to tread on delicate
ground in answering that question, Mr. Chairman. I shall have to confess
that I have been mistaken myself. Noir, as to the silver bill, I have matched
its operations very closely. I think the silver bill has had some adverse
effects, and it has had some favorable effects, on the question of resumption.
Perhaps the best way for me to proceed would be to state the adverse effects
first It has undoubtedly stopped refunding operations. Since the agitation
of the silver question, I have not been able largely to sell bonds, although
I have made every effort to do so.

"Now, another adverse effect the silver bill has had is
to stop the accumulation of coin. Since the 1st of January we have accumulated
no coin, except for coin certificates, and except the balance of revenue
over expenditure. The revenues in coin being more than enough to pay the
interest of the debt and coin liabilities, we accumulate some coin.

"Another effect that the silver bill has had is to cause
the return of our bonds from Europe. Although the movement of our bonds
in this direction has been pretty steady for more than a year, yet it is
latterly largely increased, how much I am not prepared to say.

"On the other hand, I will give the favorable effects.
In the first place, the silver bill satisfied a strong public demand for
bi-metallic money, and that demand is, no doubt, largely sectional. No
doubt there is a difference of opinion between the West and South and the
East on-this subject, but the desire for remonetization of silver was almost
universal. In a government like ours it is always good to obey the popular
current, and that has been done, I think, by the passage of the silver
bill. Resumption can be maintained more easily upon a double standard than
upon a single standard the bulky character of silver would prevent payments
in it, while gold, being more portable, would be more

195

freely demanded, and I think resumption can bc maintained
with a less amount of silver than of gold alone.

"Senator Bayard: You are speaking of resumption upon the
basis of silver, or of silver and gold?"

"Senator Sherman: Yes, sir; I think it can be maintained
better upon a bi-metallic, or alternative standard, than upon a single
one, and with less accumulation of gold. In this way remonetization of
silver would rather aid resumption. The bonds that have been returned from
Europe have been readily absorbed - remarkably so. The recent returns in
Net York show the amount of bonds absorbed in this country is at least
a million and a quarter a day. We have sold scarcely any from the Treasury
since that time. This shows the confidence of the people in our securities,
and their rapid absorption will tend to check the European scare.

"Senator Voorhees: That shows, Mr. Secretary, that this
cry of alarm in New York was unfounded. Then, this capital seeks our bonds
when this bi-metallic basis is declared?"

Secretary Sherman: Yes; many circumstances favor this.
The demand for bonds extends to the West and to the banks.

"Senator Jones: Then, in its effect upon the return of
the vast amount of bonds you refer to, would there not be an element of
strength added in favor of resumption, in that the interest on these bonds
returned mould not be a constant drain upon the country?

"Secretary Sherman: Undoubtedly.

"Senator Jones: Would the fact that they come back enable
us to maintain resumption much easier?

"Secretary Sherman: Undoubtedly.

"Senator Bayard: You speak of resumption upon a bi-metallic
basis being easier. Do you mate that proposition irrespective of the readjustment
of the relative values of the two metals as we have declared them?

196

"Secretary Sherman: I think so. Our mere right to pay
in silver would deter a great many people from presenting notes for redemption
who would readily do so if they could get the lighter and more portable
coin in exchange Besides, gold coin can be exported, while silver coin
could not be exported, because its market value is less than its coin value."

Senator Bayard: I understand that it works practically
very well. So long as the silver is less in value than the paper you will
have no trouble in redeeming your paper. When a paper dollar is worth ninety-eight
cents nobody's going to take it to the Treasury and get ninety-two cents
in silver; but what are on to do as your silver coin is minted' By the
1st of July next or the 1st of January next you have eighteen or twenty
millions of silver dollars which are in circulation and payable for duties,
and how long do you suppose this short supply of silver and your control
of it by your coinage will keep it equivalent to gold - when one is worth
ten cents less than the other?

"Secretary Sherman: Just so long as it can be used for
anything that gold is used for. It will be worth in this country the par
of gold until it becomes so abundant and bulky that people will become
tired of carrying it about; bat in our country that can be avoided by depositing
it for coin-certificates."

Such was the testimony given by Secretary Sherman in reply
to the questions propounded to him by these distinguished men, and it demonstrated
the real reason why a single standard of gold was preferred by the national
banking money power. Gold, from its portability, could be more easily exported
than silver, and large quantities of the former metal could be readily
shifted back and forth between New York City and London as a means to create
temporary panics, and thus afford the gold gamblers and stock, speculators
opportunities to depress or raise the price of

197

bonds, stocks, and securities whenever it subserved their
interests.

In 1878, after the passage of the Bland-Allison law, Secretary
Sherman authorized the sub-treasury at New York City to become a member
of the Clearing House Association, whose membership consisted of sixty-six
national banks of that city.

This association was the most powerful financial body
in the United States, and it was the head and front of the money power.

This act of Secretary Sherman was an exceedingly shrewd
move on his part to add an official sanction to the war that was to be
waged against the use of silver and silver certificates by the Clearing
House Association.

To afford a consecutive statement of the various financial
measures of Congress, we must retrace our steps to the 16th day of January,
1878.

At and prior to this time a controversy arose as to whether
United States bonds were payable in gold solely.

To set this question at rest forever, Senator Matthews,
of Ohio, submitted a concurrent resolution in the Senate, declaring that
all United States bonds issued under the Refunding Act of July 14, 1870,
and the Resumption Act of January 14, 1875, could be paid at the option
of the government in standard silver dollars of 412 1/2grains without violation
of the public faith.

All proposed amendments were voted down, and the resolution
was agreed to by a vote of 43 yeas to 22 nays.

On January 29, 1879, the House agreed to the resolu-

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tion in the form in which it came from the Senate by a
vote of 189 yeas to 79 nays.

Divested of its preamble which merely recited the facts
in controversy, the resolution is as follows: -

"Resolved by the Senate (the House of Representatives
concurring therein), That all the bonds of the United States issued under
the said acts of Congress herein before recited are payable, principal
and interest, at the option of the government of the United States, in
silver dollars of the coinage of the United States, containing 412 1/2grains
each of standard silver; and that to restore to its coinage such silver
coins as a legal tender in payment of said bonds, principal and interest,
is not in violation of the public faith nor in derogation of the rights
of the public creditor."

It is in force to this day as declaratory of the financial
policy of the United States.

On December 9,1878, Mr. Fort moved that the House
suspend the rules and pass a resolution, declaring any discrimination against
standard silver dollars by National Banking Associations a defiance of
law, and instructing the Committee on Banking and Currency to report a
bill for withdrawing their circulation.

The resolution received a majority, but not the necessary
two-thirds vote, and it failed to pass.

The republican members of the House voted almost solidly
against the resolution.

This resolution was brought forward in the House as a
warning to the Clearing House Association of New York City, composed largely
of national banks, for its refusal to accept silver dollars and silver
certificates in settlement of balance due from the various banks.

Although the Bland-Allison law was in effect but a few
months, the traitorous national banking money

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power at once begun a war upon the lawful money of the
United States, and this was done with the open consent of the Secretary
of the Treasury, who had made the sub-treasury at New York City a member
of the Clearing House Association as an aid to the consummation of its
schemes.

This action of the national banks in thus deliberately
conspiring to nullify a law of the United States, gave origin to a warm
debate in Congress, during which Secretary Sherman was severely criticized
for giving official sanction to the acts of the associated banks.

During the session of the Fifty-first Congress, at which
time Mr. Sherman was a member of the Senate, Senator Morgan, of Alabama,
in a debate upon the money question, recalled this fact and asserted that
the former had, while Secretary of the Treasury, been cognizant of the
designs of the clearing house banks to refuse silver in payment of balances,
and that those banks were emboldened to pursue that course by the acquiescence
of the Secretary.

He proceeded to quote from a statement made by Mr. Weston,
Secretary of the Monetary Commission of 1886, in which the latter said:

"On the 8th inst. [November, 1878,] a committee of these
banks [New York Clearing House Association] had a conference at Washington
with the Secretary of Treasury [Mr. Sherman], at which were present the
Attorney-General and some minor officials.

"The result was a plan submitted by the banks on the 12th
inst., and agreed to, only one bank representative (Mr. Colgate) objecting.
The leading features of it, are first, that the banks will reject silver
deposits, except as re-payable in kind; second, that silver shall not be
allured as clearing house money except

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for small fractional earns not exceeding $10; and third,
that in respect to all payments by government drafts on the New York banks
or on the United States assistant treasurer at New York, they shall be
cleared at the clearing house in New York, at which a desk is to be assigned
to a representative of the United States Treasury. At the bank meeting
on the 12th Mr. Colgate objected to the plan, that it could only mean `To
fly in the face of Congress and to declare the silver dollar that has been
declared a legal tender to be worthless."

In spite of the immense power of the banks, aided by the
official power of Secretary Sherman, to discredit the legal tender silver
dollars and silver certificates, Congress, at its very next session, after
this exposure of the conduct of the Clearing House Association and that
of Secretary Sherman, passed a law requiring that no national bank should
become a member of any clearing house, or exercise any privilege therein
to any kind whatever, unless it agreed to accept silver on deposits and
receive silver certificates as money through which the balances might be
settled.

Although the organized banks still continued their aggressions
upon the rights of the people, and although they exerted their utmost power
to degrade the silver dollar and its representative, this money became
so popular with the people that they exchanged gold coin for silver certificates
at the Treasury of the United States.

This exchange of gold coin for silver began in November,
1880, and continued until the Treasury made a gain in gold aggregating
$78,000,000.Thus the absurd predictions set forth in the veto message of
President Hayes, and echoed by the senseless clamors

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of the national banks, were answered by the common sense
and patriotism of the people of the United States.

In 1878, the year that the Bland-Allison bill became a
law, the number of failures were 10,478, with liabilities of $284,383,000;
in the following year of 1879 the list of failures were only 6,658, with
liabilities of $98,149,000- a remarkable decrease.

According to the provisions of the Resumption Act of 1875,
greenbacks were redeemable in specie on and after the 1st day of January,
1879. Prior to this time greenbacks and United States notes were on a parity
with gold, and hence on May 31, 18788, Congress enacted a law forbidding
the further destruction of these legal tenders, and the Secretary of the
Treasury was authorized to re-issue them for the payment of demands against
the United States. Senator Thurman introduced this bill in the Senate,
and against the combined opposition of the national banks, secured its
passage through Congress, thus preserving this currency to that amount.

In the meantime, however, prior to January 1, 1879,Secretary Sherman issued a circular to the collectors of the various
ports throughout the United States, directing them to receive United States
notes and Treasury notes in payment of duties on imported goods.

The act of July ll, 1862, which provided for the issue
of Treasury notes, prohibited the Secretary of the Treasury from receiving
them for duties on imports.

Nevertheless Secretary Sherman, by a mere executive order,
nullified this part of that act by ordering the collectors of custom duties
to receive them. This order made the Treasury notes, in this respect, the
equal of gold.

The object of the Secretary in adopting this policy

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excited considerable discussion in Congress, but the order
was acquiesced in by the people, for the reason that the discrimination
so long exerted against the greenback was withdrawn. The government honored
its own currency by receiving it for taxes-the best form of redemption
ever adopted by a nation.